They were penned in 2016, when house prices were soaring. (Well, in most parts of Australia, except for WA.)

The negative gearing changes have largely been reported as a “ban”. That’s not quite correct.

Labor’s policy will still allow negative gearing under some circumstances. And they’re important exceptions for some investors.

The first is for those who buy brand-new property, who will still be able to claim negative gearing, as investors can now. Labor’s claims this will help encourage investment in development property. (But, as I argue continuously, investing in property bought from developers is the single dumbest thing a property investor could do. It will largely cost you hundreds of thousands of dollars.)

The second important misconception is that the negative gearing is restricted to only the property asset it relates to.

What does this mean? Let’s take a police officer, earning $90,000.

Say our friendly plod bought a property for $600,000, which is negatively geared to the tune of $30,000 a year.

If this was the officer’s only investment asset, existing tax law would mean that they would only pay tax on $60,000 ($90,000 police income less $30,000 negative gearing from the property), saving them roughly $10,500 in tax.

Under Labor’s policy, that $10,500 tax saving would be gone.

However, if the Sarge owned other investments – bought over, say, the previous 15 years – that were positively geared, he could then offset that negatively geared $30,000 against the income from those other investments that were positively geared.

How would that work? Let’s say our police officer had bought two properties, five and ten years ago, and has been regularly investing in dividend-producing shares over the same period. Over the course of time, the positively geared, or passive, income from those investments has grown and now amounts to $30,000. He’s paying tax on an income of $120,000 ($90,000 police income, plus $30,000 from his investments).

Then he buys the $600,000 property that is negatively geared to the tune of $30,000.

Now his income is $90,000, plus $30,000 (from older “passive” investments that are now positively geared), less $30,000 from the new investment. Labor will allow negative gearing on an asset to be written off against other “passive” income from other investments, so this investor will gain the full benefit of the negative gearing on this new property investment.

If the negative gearing losses had have been $40,000, then the $10,000 excess (over the $30,000 earned from other investments) would have been denied a deduction (until later years, at a minimum). His net income would have been $80,000, but Labor’s policy would mean he would pay income tax on $90,000.

But will Shorten implement this policy at all?

There’s a growing chorus that says Labor might not. Or might delay the legislation for a number of years, at least.

Why? Labor’s negative-gearing policy was specifically designed to put downward pressure on property prices. It was a central plank of its “housing affordability” policy.

(Bizarrely, Labor then argued that it wouldn’t reduce prices much, only 2 per cent, while the Coalition argued it would smack prices by 10-20 per cent.)

But since it was launched, property prices have been flushed down the toilet in Sydney and Melbourne, while Perth has been in trouble for a lot longer.

There are now rumblings that Labor wants/needs to back away from this policy – or turn a housing downturn into a bloodbath.

Does Labor want to kill the property market? Probably not. At best, this policy is looking more medium term (if at all) rather than a first-term imperative.